SLPA raising external funds for ECT deviating from original plan
The long- delayed Colombo Port East Container Terminal (ECT) development project taken over by the Sri Lanka Ports Authority (SLPA) is now seeking a US $325 loan facility, deviating from its original plan of using its own funds for procurement and construction work.
A detailed plan of developing the Eastern Jetty with SLPA funds without entering into a Public-Private Partnership for the partially completed ECT project was submitted as a prelude to settle the port workers strike against handing it over to India’s Adani Group, Ports Ministry documents divulged earlier.
However now the SLPA is to raise a $325 million financing facility to procure the required equipment to develop the ECT of the Colombo Port, an Expression of Interest (EOI) notice published recently revealed.
The SLPA has called for an EOI from prospective domestic/International banks and Financial Institutions, jointly with offshore loan syndicating partners to procure required equipment and Terminal Operating System.
SLPA has already developed 575 meters of the quay wall, adjacent yard area and connected facilities at ECT.
In order to carry out development and operate the ECT as a highly sophisticated container terminal, SLPA requires investing further funds for the balance civil construction of 1320m quay wall the container yard, related facilities and for the procurement of Equipment and Terminal Operating System, Ports Ministry memorandum revealed.
The remaining investment requirement for ECT will be made from SLPA funds, the document indicated. However according to the original plan; the Authority had planned to carry out the development work by using its own internally generated funds for the development activities.
The terminal’s further development undertaken by the Authority is aimed at enhancing operations at an estimated cost of up to $700 million, provisional estimates revealed.
In this context it has to provide a sum of $375 million from its own funds as it plans to raise $ 325 million from the loan facility.
The bids for procurement of equipment have been already received and evaluations are underway, a senior Ports Ministry official said.
Upon qualifying under this EOI, selected bidders will have to provide Request for Proposals (RFP) containing detailed information describing this financing opportunity, based on which specific financing and structuring proposals can be submitted, he added.
The delay in the finalisation of construction work without the commencement of terminal operations during the last five years has caused a revenue loss of around Rs. 250 billion to the state, Finance Ministry provisional data showed. Even today ECT is not fully operational.
The SLPA built a part of the ECT adequate to accommodate one mega container ship investing more than $280 million and also ordered the required cranes before 2015 and were delivered around last year.